China November 2015: Pollution and tax cuts push market up 24%

* See the Top 380 All-local models and Top 70 brands by clicking on the title *

Wobbly summer sales are a long lost memory in China, with new light vehicles gaining a whopping 24% year-on-year to 2.196 million units in November. After the Chinese government halved the purchase tax to 5% for vehicles with engine displacement lower than 1.6 litres in early October, the market reacted with a 13% growth then. November sees the effect of the tax cut amplified, with eligible vehicles up 29% to 1.56 million units or 71% of the market. Another factor has weighed in the Chinese market this month: record pollution levels, notably in the Beijing area, have triggered a mini car purchase rush: driving around is considered less dangerous than walking as air inside a car is perceived to be less polluted than outside. Probably not what the Chinese government had in mind…

9 out of the Top 10 SUVs hit all-time high volumes – including the GAC Trumpchi GS4.

All-in-all and for the first time in the past two years, all light vehicle segments are in positive territory this month. After crossing the 600.000 monthly unit mark for the first time in history last month, SUVs continue on their unbridled cavalcade and pass another milestone at 716.200 units, up a stunning 72% on the same month last year. SUVs have gained 10 percent market share in China in the space of one year, representing one in every three light vehicles sold in the country this month vs. just 23.5% a year ago. Struggling lately, sedans (+9.1% to 1.17 million), MPVs (+8.8% to 218.400) and microvans (+7% to 91.600) all post year-on-year gains in November. The year-to-date light vehicle total now stands at a record 18.7 million units, up 5.9% on the same period in 2014 – to be compared to +5.4% and 15.8 million units in the U.S., also evolving at record levels.

The V3 crossover accounts for over 80% of all Brilliance sales at home.

Oblivious to the emission scandal that is plaguing the brand worlwide, sales of Volkswagen models produced locally are up a flamboyant 38% year-on-year to 266.763, but this month a record four additional brands manage six-digit sales figures: Buick is up an even more impressive 52% to 120.044 sales, boosted by the tremendous success of the new Excelle GT (+72%) and the Envision SUV, crossing the 20.000 monthly sales mark for the first time at 21.519. Hyundai up 11% to 110.094, Nissan up 22% to 103.869 (partly thanks to the all-new Lannia, more on this below) and Toyota up 18% to 101.450 follow, with Honda (+36%) and Ford (+32%) outpacing all of them and getting dangerously closer to the symbolic 100.000 milestone figure at 97.963 and 91.297 deliveries respectively.

Zotye X5. SUVs represent 78% of the brand’s sales in November.

Chinese carmakers are experiencing a once-in-a-lifetime year in 2015: some see their sales rocket up on the basis of just one new affordable SUV… Changan follows the market at +24% and Haval is up 31% to pass the 70.000 monthly sales for the first time, with its three best-sellers posting all-time record volumes in November: the H6 has its first month above 40.000 sales (40.311), the H2 is up 51% to 18.077 and the H1 up 31% to 7.965. For comparison, the best-selling SUV in the U.S. in November is the Toyota RAV4 at 27.368 sales. Beijing Auto is up 60%, Dongfeng up 32%, Baojun up 74% and Geely up 31%. GAC Trumpchi is up 129% with SUVs accounting for an astounding 95% of its sales, Zotye is up 79% (78% SUV), Haima up 43% (48% SUV), Brilliance up 80% (87% SUV), Soueast up 102% (68% SUV) and MG up 73% (72% SUV). Only Geely hasn’t yet caught the SUV boat, but brace for a thunderous entrance once it does.

Chinese carmakers were struggling to hold market share in their home market up to roughly a year ago, but they have masterfully managed to anticipate and ride the sudden thirst of Chinese consumers for SUVs. Such a quick turnaround in such a large market – the largest in the world – is nothing short of astounding. Another testimony of this spectacular about-turn is the fact that 9 out of the Top 10 best-selling SUVs in China in November break their all-time monthly record, and the 8 best-selling Chinese SUVs all deliver their highest ever monthly volume in November. Some of the most spectacular performances are delivered by the ChangAn CS75 (+107%) and Nissan X-Trail (+45%) while the Brilliance V3 is up 94% on October which was already a record, and accounts for over 80% of the brand’s November sales! A record total of 26 SUVs sell over 10.000 units in China in November, out of a total 74 nameplates with five-digit sales figures in the light vehicle market exlcuding LCVs, also a record and exactly double the U.S. number in November (37).

The Ford Edge smashes its monthly volume record by almost 50% this month.

Top 20 best-selling SUVs in China – in bold the new monthly volume records:

Pos

Model

Nov-15

/14

Nov-14

1

Haval H6

40,311

30%

31,019

2

Baojun 560

31,228

new

0

3

GAC Trumpchi GS4

24,650

new

0

4

VW Tiguan

22,325

64%

13,600

5

Buick Envision

21,559

217%

6,795

6

ChangAn CS75

20,812

107%

10,031

7

JAC Refine S3

20,520

37%

15,004

8

Nissan X-Trail

20,504

45%

14,121

9

Haval H2

18,077

51%

12,007

10

Beijing Auto Huansu S3

18,005

51%

11,905

11

Honda CR-V

17,297

41%

12,256

12

Brilliance V3

16,257

new

0

13

ChangAn CS35

14,489

63%

8,863

14

Chery Tiggo 3

14,004

27%

11,048

15

Toyota RAV4

13,721

53%

8,957

16

Zotye T600

13,699

67%

8,221

17

Honda Vezel

13,587

40%

9,697

18

Hyundai Tucson

13,052

552%

2,002

19

Ford Edge

13,010

new

0

20

Ford Kuga

12,953

13%

11,461

MPVs are not dead: the Huasong 7 is up 302% on October to 4.155 sales.

At the very top of the models ranking, the Wuling Hongguang is back to negative ground at -3% but lodges its 2nd highest volume of the year at 67.941 – that’s more than the Ford F-Series in the U.S. this month (65.193). In 2nd place, the VW Lavida – facelifted for the Guangzhou Auto Show – impresses at last at +38% to 52.440 units, also its 2nd best month of 2015. As the best-selling sedan in China, it compares with 30.945 Toyota Camrys in the U.S., the sedan titleholder there. As mentioned earlier, MPVs are not dead: the Beijing Auto Weiwang M20 is up 92% year-on-year to smash its personal best at 22.651 units, as does the Dongfeng Fengguang at 21.188 (+62%) while the Dongfeng Future is up 132%. Premium MPV are starting to shake it off as well: after five months of very shy showings, the Huasong 7 – the first offering from Brilliance’s new MPV brand – takes off in November, multiplying its October score by 4 to reach 4.155 deliveries.

Instant blockbuster: the Nissan Lannia

Sedans are also starting to show some great performances, the Nissan Sylphy breaks a record at 37.427 sales, the VW Lamando smashes its previous high by almost 50% at 15.710 and the Buick Verano continues its forward march, up 36% on its October record to 12.659 sales. A special mention however goes to the Nissan Lannia. Launched last month as the spearhead of a new youth-oriented campaign, the controversially-designed compact sedan races to 10.514 sales for its first full month in market, already blasting through my “bar for success” established at 7.000 units. The Verano and Lannia are here to show two things: 1. that the sedan segment is still the property of foreign manufacturers, and 2. that there is still potential for nameplates of this size, even though this segment is already the most crowded in the market. Creative segmentation will be rewarded. Six new locally-produced nameplates hit the Chinese sales charts this month, which we cover in a separate update.